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Bob Gauthicr's resume runs the gamut, from beer truck driver to tribal jailer to presidential appointee.
While he may have taken an unusual path to success, his heritage, experience, and entrepreneurial spirit make Gauthier uniquely qualified as one of the only independent economic development consultants for Montana's Indian reservations.
Across Montana and across the United States, reservation economies face higher levels of unemployment and poverty, along with lower worker productivity, per capita income, wages, and housing values. At the heart of the economic disparity are the comparatively small private sectors found on reservations.
Nationwide, 33 percent of reservation jobs are government jobs compared with only 15 percent in the country overall. Conversely, 44 percent of reservation jobs are in the private sector compared with 80 percent in the nation as a whole, according to a presentation by Senior Research Analyst for the Montana Department of Commerce Susan Ockert. And Montana tends to follow suit, she said, with tribal governments, not consumers, being the main drivers of tribal economies.
Tribal members represent 7 percent of Montana's population, and reservations occupy 5 percent of Montana's land base. Yet American Indians owned only 1 percent of all privately owned Montana businesses in 2002, according to that year's U.S. Census. And while there were 110 firms for every 1,000 Montanans, there were 34 American Indian owned firms per every 1,000 American Indians in Montana.
So the answer to stimulating reservation economies is not tribes being in business, said Gauthier, but tribes creating an environment that is conducive to business.
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This is why in 2005, he formed Ahoy Leasing and Development and began providing economic development consultation to tribes.
Economic Climate on Reservations
Gauthier provides the technical assistance tribes need to build capacity and create vibrant economies. His job, he explains, is to help create the vision and link the resources. There is no shortage of opportunity, or good ideas, he said, but the economic climate does not encourage Indian entrepreneurship.
For many years, reservation economies were administered by federal government, leaving little incentive for private business ventures. As a result, values such as entrepreneurship and homeownership, often associated with the greater American psyche, were suppressed on reservations.
More fundamentally, the culture of borrowing and lending is absent from reservation economies, largely because the necessary financial institutions aren't readily available. Uncertain legal framework and lack of home equity have made it very difficult for Indian entrepreneurs to obtain financing for investment.
Self governance opportunities really took off in 1975 when Congress passed the Indian Self-Determination and Education Assistance Act, better known as Public Law 93-638. This was the tribes' first real opportunity to look at economic development in a meaningful way.
And this is what Gauthier has spent much of his professional life trying to promote.
Entrepreneurial Mindset
Gauthier was born in Missoula in 1950 and grew up in Arlee. His mother was Swedish and his father French Indian. Along with a deep appreciation for his heritage and respect for native culture, Gauthier's parents passed along the entrepreneurial mindset, self-sufficiency, and hard work.
At the age of 22, Gauthier invested part of a tribal land settlement payment and became partner in an automotive reconditioning business in Missoula. He and his partner saw an opportunity, rented a building, and with $500 each started a business.
Only one year later, Gauthier married, sold his share of the automotive business, and moved to Polson. In Polson, Gauthier tried his hand in the restaurant business and added a pizza parlor onto the Kentucky Fried Chicken his brother had opened. But this too lasted only one year. Brothers don't always make the best business partners, he said.
So, for the next six months, Gauthier drove a beer truck in Missoula. In those days, you sold right off the truck, he said, which was a lot of fun, but not conducive to married life. So, when he saw an ad for the Terry Hober Insurance Agency he went down, took a test, and got the job.
Over the next six years, Gauthier had two daughters and a lot of success in the insurance business. He became a life insurance underwriter and earned his real estate license. At the time, IRAs were just coming out, and Gauthier was able to write them on reservations, which didn't have qualified pension plans at the time. Gauthier learned a lot about personal finance and financial planning that he was able to use later on.
In 1980, Gauthier separated from his first wife and moved to Kalispell. The automotive reconditioning business he originally invested in had expanded into a Honda dealership there, and Gauthier thought he'd try his luck as a car salesman. Hondas were popular at the time, and they sold easily with little negotiation. And he was good at it. The change of pace was just what he needed at the time, Gauthier said.
When the dealership sold a year later, he decided to take advantage of an opportunity to open a restaurant and moved to Pablo. By the time the deal fell through, Gauthier's two daughters were already enrolled in school. So he settled in Pablo and took the only job he could find as a tribal jailer. He worked the night shift at the jail and sold real estate during the day, while raising two daughters.
In 1983, Gauthier was hired as director of the Salish Kootenai Housing Authority where he spent the next 20 years.
"This is when things really started to get good for me," he said. Shortly thereafter, he was able to buy a house and gain primary custody of his daughters. The job was a new challenge, and he loved it.
"Going to work for the tribe was the best thing that ever happened to me," he said. Being Indian has afforded Gauthier many opportunities he may not otherwise have had, he said, and at the same time he feels so lucky that he has been able to use his skills and experience to give back to the tribe.
In 1985, he opened Gauthier's steak house in Poison. So, in addition to a full-time job as housing director and single dad, he was now running a restaurant. The steak house was very successful by the time he sold it in 1997, but there were some tough times at first. He spent all day at the housing authority, the dinner hour at the restaurant, and was home in time to help his girls with their homework. Thanks to help from his sister and a few key employees, the steak house eventually became successful.
"In those days, the Flathead was really booming, it was the place to be," he said. "Celebrities such as Howie Long and Larry Krystkowiak were regulars at the steak house."
The steak house also brought Gauthier together with his current wife, Myrna, who came to work for him in 1986. "Myrna has been a great partner," he said. "She has brought a great deal of stability to my life."
Indian Housing Issues
Insurance
In 1986, Gauthier also became involved with the National American Indian Housing Council. At the time, tribes had a hard time finding extended fire and home insurance coverage. So he helped to create Amerind, their own self-funded risk pool. Gauthier served in some capacity from the time Amerind was created until his term as chair was over in 2004. Today, Amerind insures 70,000 housing units nationwide and does about $20 million a year in premiums, he said.
U.S. Department of Housing and Urban Development
In 1988, Gauthier was appointed to the Secretary's Committee of U.S. Department of Housing and Urban Development (HUD), to review the delivery of Indian housing. One of the recommendations the committee made was to form a commission to find out why HUD was failing on reservations. And in 1991, Congress formed the National Commission on American Indian, Alaskan Native, and Native Hawaiian Housing.
Gauthier became chairman of the commission, which included 12 commissioners. Hearings were held in eight different locations in 1991 and 1992 and the commission published a report, A Blueprint for Change, with 48 recommendations, most of which made their way into NAHASDA, The Native American Housing Assistance and Self Determination Act of 1996.
The commission discovered several programs that were better suited than HUD to serve reservations. HUD is designed to serve urban areas, and reservations are mostly rural. But the most startling revelation, Gauthier said, was that there was virtually no housing market on reservations because banks were reluctant to grant mortgages on reservations. So HUD was effectively Indians' only resource for housing. "This was the renaissance and the beginning of solving Indian housing problems," Gauthier said. "That's what we are still doing today."
Banking
The problem for banks is that reservation land is held in trust by the federal government. This causes difficulty if banks are forced to foreclose and makes it hard to sell houses back into the market. Also, banks are wary of dealing with tribal courts.
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As a result, HUD created the "184 Guarantee Program," a 100 percent guarantee to lenders that make loans to qualified Indians.
By the time NAHASDA passed in 1996, Gauthier said quite a bit of progress had been made on the Indian housing front. NAHASDA took HUD out of the picture and let tribes control their own housing. Like everything else, Gauthier said, the housing problems will be best solved by the tribes themselves.
"There has been a lot of non-Indian influence on reservation life, and a lot of it was benevolent," he said. "But no one ever asked the tribes what they wanted." Now tribes have greater education and capacity to integrate institutions under the guidelines of their own culture and values. The efforts of HUD, for example were in good faith. But HUD imposed a system that Indians would never have developed themselves. Therefore it never worked for reservations, Gauthier said.
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